Economic costs of extratropical storms under climate change: an application of FUND

Abstract

Extratropical cyclones have attracted some attention in climate policy circles as a possible significant damage factor of climate change. This study conducts an assessment of economic impacts of increased storm activities under climate change with the integrated assessment model FUND 3.5. In the base case, the direct economic damage of enhanced storms due to climate change amounts to US$2.8 billion globally (approximately 38% of the total economic loss of storms at present) at the year 2100, while its ratio to the world GDP is 0.0009%. The paper also shows various sensitivity runs exhibiting up to 3 times the level of damage relative to the base run.

Keywords:

• climate change
• extra tropical storms
• economic impact

Acknowledgements

Financial support by the US Environmental Protection Agency and the German Research Foundation (the ‘Future Ocean’ Cluster of Excellence programme) is gratefully acknowledged.

Notes

1. Extratropical storms are also called extratropical cyclones, commonly signifying large-scale storms excluding tropical cyclones. The American Meteorological Society defines the term as “any cyclonic-scale storm that is not a tropical cyclone, usually referring only to the migratory frontal cyclones of middle and high latitudes” (http://amsglossary.allen press.com/glossary). The study here draws on the CRED EM-DAT database for storm damage data (see Section 2.2 for a discussion), and thus the data classification criteria of extratropical storms are identical with that of the database.

2. The Kaya identity is expressed in the from: M = P* (Y/P)* (E/Y)* (M/E) = p*y*e*m, where M = emissions; P = population; Y = GDP; E = energy use; y = (Y/P) = percapita GDP; e = (E/Y) = energy intensity of production; m = (M/E) = the carbon intensity of energy.

3. In other words, the classification criteria of extratropical cyclones are identical with the CRED databases.

4. The representative numbers from Lambert and Fyfe's ‘1ppcto2x’ scenario runs are used. The scenario is that CO₂ concentrations are gradually increased from the pre-industrial level to the level doubled over about 70 years and then held constant. The values of δ are calculated by averaging the enhancement of storm occurrence at the time when concentrations hit the doubled level (years 61–80) and of long-run levels (years 201–220).

5. In other words, the effect of climate change on storm damage is much less than 38% of total at present.

6. This is about the baseline change and not about temporal variability of incidence, and of course, the latter variability factor might justify stronger institutions against storm damage. However, this issue is beyond scope of this paper.